Cape Town - Pepkor's cash discount market clothing retail operations performed strongly in the six months to December, but the results were affected by R242,1 million of extraordinary items representing provisions for losses inherited by Pepkor following its recent unbundling.
It was Pepkor's first report since restructuring and the intention was to write off the provisions instead of amortising them over 20 years, Carel Stassen, the managing director, said yesterday.
He said from the income statement one would get the impression the group did not do as well as in the corresponding six months in 1999, with turnover down 15 percent to R2,5 billion and operating profit down 9 percent to R142,3 million.
After the restructuring at the end of last year and the unbundling of its controlling interest in Shoprite and the UK company, Brown & Jackson, Pepkor now consists of three clothing chains, Pep, Ackermans and Best & Less in Australia.
However, comparative figures also included the turnover and profit contributions of Stuttafords and Cashbuild, which were sold only at the beginning of last year. If their turnover and profits were ignored, the continuing operations showed an increase of 14,4 percent in turnover and 10,8 percent in operating profit. An interim dividend of 9c was declared.
Pep lifted sales 19,7 percent to R1,37 billion and operating profit was up 39,3 percent to R104 million due to more focused marketing, more attractive merchandise and better presentation of its stores.
Ackermans' turnover grew 17 percent to R537 million, while operating profit climbed to R43 million from R36 million. Seventeen new stores were opened. Another two stores are planned to open in the second half of the year.
Pepkor's share price fell 20c to close at R3 yesterday.